General Motors recharges on future of electric car
General Motors is back at the scene of the crime. When the Detroit automaker pulled the plug on its unprofitable electric-vehicle program...
Seattle Times business reporter
General Motors is back at the scene of the crime.
When the Detroit automaker pulled the plug on its unprofitable electric-vehicle program in 2000, it became known, in the words of a popular documentary, as the company that killed the electric car. Its love affair with the Hummer didn't help either.
Now the company is betting big bucks — most of its current research-and-development budget — that the internal-combustion engine's time is running out. By spearheading a new generation of electric automobiles, the beleaguered giant also is hoping it can reclaim from Toyota the title of world's top carmaker.
GM's not-so-secret weapon: a sporty plug-in hybrid known as the Chevy Volt, scheduled for launch in 2010.
"We believe profoundly in the electrification of the automobile," said Robert Lutz, GM's vice chairman and head of product development, in an interview Tuesday in Seattle.
Lutz, 76, a globe-trotting auto-industry veteran who's held top positions at Ford, BMW and Chrysler, is the Volt's most ardent champion.
Toyota and Honda got far ahead of GM in commercializing electric cars in recent years, but Lutz vowed that with the Volt, "for the first time, our well-thought-of Asian competitors will be left in the dust."
Unlike most available hybrids, the Volt will be able to run on electricity alone for up to 40 miles. When drivers go beyond that range, a gasoline motor kicks in, generating power to keep the electric motor running.
Current hybrids from Toyota and Honda use electric motors to supplement the car's gasoline engine, so even a short trip burns gas going uphill or at high speed.
GM says 78 percent of U.S. commuters drive 40 miles or less in a day. The Volt, said Lutz, will be able to cover that ground on electricity alone, after charging for six hours from a normal electrical outlet.
GM's rivals are not standing still. Last week, Toyota said it, too, would launch a plug-in hybrid available in 2010. On Monday, Honda began limited production of an even more futuristic technology: a car powered by hydrogen fuel cells, which emits only water vapor.
GM's about-face on electric cars underscores the urgency faced by carmakers to address the twin problems of greenhouse-gas emissions and skyrocketing fuel costs. The transportation sector accounts for 28 percent of greenhouse gases in the U.S.
And as gas prices topped $4 a gallon, SUV sales — the bread and butter of the American car industry — have plummeted, and sales for smaller, fuel-efficient vehicles are soaring.
Although the U.S. government has bet heavily on ethanol and diesel from renewable sources to complement fossil fuels, many experts think electric vehicles are the long-term solution. They can help radically cut carbon emissions while relying on the existing electrical grid for fuel.
Cambridge Energy Research Associates (CERA), a prominent Boston consultancy, estimates that if the entire U.S. vehicle fleet suddenly became electric, gas consumption would drop 70 percent, and electric-power consumption would jump about 17 percent.
"It's not that big a hit for the electric-power industry," said CERA consultant Patricia DiOrio.
There are plenty of challenges, however. Battery technology is not adequate yet, or at least not affordably. Most existing hybrids run on nickel-metal hydride batteries, which do not store enough power to run the vehicle purely on electric power for more than a few miles.
At the other end of the scale, Tesla Motors, a California startup funded by venture capitalists, claims that with a lithium-ion battery, its recently launched electric car can run 220 miles per charge — but it costs more than $100,000.
Other challenges include devising ways for people to recharge their cars, and making sure increased demand for electricity does not translate into more greenhouse-gas emissions.
Kimberly Harris, chief resource officer for Puget Sound Energy, Washington's largest utility, said power to fuel an electric fleet shouldn't be a problem, especially if people charge their cars at off-peak hours. But there are many unsolved questions, such as how consumers will charge their vehicles in public places, and who's going to pay for it.
Lutz said that if the U.S. is going to electrify its car fleet in a clean manner, without burning much more coal, windmills and solar farms are not enough.
"The only real option is nuclear energy," he said. However, not a single nuclear plant has been built in the U.S. in decades.
GM's electric ambitions rely on designing a lithium-ion battery — a type commonly used in laptops but difficult to scale for a car — that's cheap and powerful.
Lutz, who was in Seattle to speak with local auto journalists, said the company is on track.
"We are simply quite startled and amazed at how everything is working according to plan," he said.
But the Volt is not alone.
Toyota, whose wildly successful Prius established a niche for hybrids, recently unveiled plans for a plug-in version, also powered by a lithium-ion battery. It will be available to commercial fleets in 2010, Toyota says.
Project Better Place, a Silicon Valley startup, earlier this year struck a pact with Renault-Nissan to make a purely electrical vehicle with swappable batteries available to Israeli customers in 2010.
Most big carmakers will likely focus on areas where driving distances are shorter, gasoline prices are higher and big carbon footprints are unpopular, said Craig Giffi, vice chairman and U.S. leader of consumer and industrial products for consulting firm Deloitte.
Places like Israel, small European countries, California, Oregon and Washington seem ripe for experimentation.
Locally, Puget Sound Energy is launching a two-year pilot program to better understand how plug-in vehicles and their owners will interact with the existing electricity grid.
"We should have it up and running in the summer with a couple of plug-in hybrids," said Tom Maclean, head of emerging technologies for the utility.
V2Green, a Seattle startup founded by Microsoft veteran David Kaplan, is working on software to allow vehicles to charge at optimal times — like nighttime, when household and business use is lowest.
First test: reliability
But before the market adopts electric vehicles, automakers have to prove they're reliable.
"You're probably talking about a decade before you start seeing any significant penetration," said CERA's DiOrio.
That said, the élan that has led Big Auto to bet on electricity may be unstoppable. "I think there's a tipping point; we may have reached it," said Deloitte's Giffi.
Lutz said the first-generation Volt will retail for about $40,000 and generate no profit for GM. The company hopes to make money as it rolls out later versions of the vehicle and other plug-in models.
Tougher environmental and fuel-economy regulations make electric vehicles "the only path to salvation," Lutz said. These government mandates could also help keep the momentum if oil prices fall, he said.
Assuming all that, Lutz said, by 2020 or 2025 between a quarter and half of all new vehicles sold in the U.S. will be electric or hydrogen-powered.
Ángel González: 206-515-5644 or firstname.lastname@example.org
Information in this article, originally published June 18, 2008, was corrected June 30, 2008. A previous version of this story incorrectly stated that most existing hybrid vehicles use nickel cadmium batteries, not nickel-metal hydride (NiMH) batteries.
Copyright © 2008 The Seattle Times Company
UPDATE - 09:46 AM
Exxon Mobil wins ruling in Alaska oil spill case
UPDATE - 09:32 AM
Bank stocks push indexes higher; oil prices dip
UPDATE - 08:04 AM
Ford CEO Mulally gets $56.5M in stock award
UPDATE - 07:54 AM
Underwater mortgages rise as home prices fall
NEW - 09:43 AM
Warner Bros. to offer movie rentals on Facebook